Higher production, lower prices, less money, still bigger budgets    

Feb 02, 2026 Features / Columnists, The GHK Lall Column

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Hard truths…

Kaieteur News  – Neither oilman nor math man did one have to be.  Simple arithmetic and commonsense suffice.  When leaders are principled, keen insights are theirs.  They don’t play shifty games, discard wisdom, gamble recklessly.  I urge fellow citizens to suspend their partisan prejudices; be honest with themselves.  Just this once.

The word-persistent and pounding-was all over.  Oil prices set for a correction.  It’s a gentle way of saying heading downward.  The steepness and timespan no one can chart, estimate, with complete authority.  Not even oil market watchers with stellar records.  Estimates and projections are usually of that nature.  In 2025, and in their infinite wisdom, PPP Govt thinkers did the smart thing, but to a point only.  Half smart, I would say.  Oil prices will decline.  Smart.  Per 2025 budget estimates, it was oil prices will decline by 2.3%.  Half smart or less than a quarter smart is what I put before all citizens, PPP friendly, PPP enemy.  A decline of 2.3% is so miniscule, it was better not to mention at all.  A blip, as is said in the trade, sometimes smaller than the size of intraday price movements.  Instead of an insignificant and inconsequential 2.3% slip, oil prices fell in 2025 by 14.5% from the 2024 average.  I think there can be agreement that 14.5% means something, is material, strikes and hurts.  Revisions and adjustments enter official conversations, influence calculations, decisions.  No such thinking happened.

When oil prices decline more than six times the government’s estimate, and give strong indications of continuing retreat, then a sensible and constructive government tugs on the reins.  Smaller budgets.  Softer spending.  Lower borrowings.  At twice or thrice the 2.3% estimated drop for 2025, the PPP Govt would still have done well.  But to call the anticipated decline in percentages that were realistic would then necessitate, nay demand, a more conservative mindset, approach.  I repeat to remind.  Smaller budgets.  Softer spending.  Lower borrowings.  Such considerations could never be allowed to enter the thought frame.  To do so would hamper the rampaging thievery, runaway capitalising, of the rogues and scoundrels whose white blood cells are multiplied by bigger budgets, bigger withdrawals, bigger borrowings.  The wise-guys in the PPP Govt’s brain trust had to find a basis for continuing down the reckless path they traveled, loved.  More barrels daily.

More daily production has merits, (depleting asset suspended temporarily).  The merits start to dwindle, then disappear, when oil prices nose into double-digit percentage territory.  Not nosedive, but steady sniffing for a lower, sturdier resting place.  Say around US$50-55 a basket.  Though oil hasn’t reached there (hopefully doesn’t), the daily production gains recorded in 2025 over 2024, yielded this wakeup call: less revenue collections.  The numbers testify: 35 million barrels more in 2025 over 2024, and Guyana’s 2025 oil revenue is US$200M less versus 2024.  A PPP ole-head assured expectant Guyanese that more barrels mean more dollars for them.  They wait, count their woes.

I regret writing this, but must.  I believe that the PPP Govt’s 2.3% price decline estimate was foxily underestimated, understated.  So that the fun and games (spending and stealing) could continue unchecked.  I will be reasonable and charitable.  A mistake was made with that estimate in 2025.  It’s costly history.  Therefore, I assert that prudence should have guided-indeed, compelled-PPP Govt planners and decisionmakers to unveil a smaller budget.  Yes, the corruption crowd would feel the squeeze, be forced to slowdown.  A smaller budget with a smaller Oil Fund drawdown and a smaller loan program would be the apex of astuteness and stepping out of the path of a knife falling point forward.  Falling oil prices.

Demand is softening.  Gold is spiraling.  Investors are praying.  National oil suppliers desire to maintain their revenue levels.  More barrels.  Venezuelan oil hovers like a thoroughbred waiting for release.  More barrels.  An Iranian strike could tighten supply, level the price field.  Putting on my McKinsey hat, the advice would be to go slow.  Read the times.  Manage cravings.  People in and out of the PPP Govt should have no difficulty picking up the message immediately. Stop budgeting and borrowing so much to feed the now out-of-control spending habit.  Debt servicing has been sidestepped.  It’s bludgeon and bummer, when oil prices rollover.

No one can persuade that the PPP wisemen don’t know, can’t fathom, any of the above.  I need none to convince me that national development priorities represent anything but a con game.  Prices rise, prices fall.  The good times roll.  Guyanese grind it out.

(The views expressed in this article are those of the author and do not necessarily reflect the opinions of this newspaper.)

 

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• bigger withdrawals, Budgets, Govt planners, Guyana’s 2025 oil revenue, McKinsey, PPP Govt., smaller budget

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